Alan Cathcart speaks to Royal Enfield CEO Siddhartha Lal

Royal Enfield on the new 650 twins and the future

Written by Alan Cathcart, Date 1:39 PM

“What we’re trying to accomplish, in our own bumbling and gentle way, is World domination.” Those were the words of Royal Enfield CEO Siddhartha Lal at the launch of the new 650cc twins. Now we’ve asked him to explain more about the plans behind those bikes and how they fit into his plans for Royal Enfield’s continued growth.

AC: Why did you limit the new Twins to 650cc? Why not make them 750cc?

SL: We wanted to make a motorcycle that was accessible to our Indian market audience, which they’ll feel is a big step up by their standards from what they’ve currently got, whether it’s a Royal Enfield or another motorcycle. Yet it needs to be accessible, too. Sometimes too much power in a country like India is too much to handle, and then you also compromise on fuel efficiency, on maintenance costs, on the price of the motorcycle, all of that. So on one hand we wanted to make it accessible, but on the other hand we wanted to make sure that it is super appealing in markets like the UK, USA, Australia and so on. It will hold its own easily, I think.

Also, we don’t like being in competition – we prefer to build a space where there are very few other companies, very few other products, or where there’s a very different market. So what I see right now in Europe and America is that the 800cc market is very crowded, but there’s not that much one step below that. And honestly, when you eventually get to ride our motorcycle you’ll see it’s not compromised at all on that front. OK, maybe it still doesn’t have super top-end performance, but all the way up to the 100 mph level it does the job as well as or better than any other.

You’ve said that you don’t want to make anything smaller than 250cc, or bigger than 750cc. Can we assume then that there will be a 750 version of this engine?

Not at all – it just sets the outer limit, that doesn’t set our ambition. So we’re not making any 250 or 750, we’re actually restricting ourselves, by our own needs, between 350cc and 650cc right now.

The new bikes have OHC engines. Did you ever consider making a pushrod version as an extrapolation of your existing singles?

I was reasonably certain from the start that we had to go to an overhead cam engine. We don’t do things specifically for historical reasons, but more for character, and to be appropriate for the times. What our customers are interested in is the character of the engine, which is Royal Enfield’s case means the low end torque, it’s the feeling that you get when riding it, it’s the sound, that’s what they’re interested in. It’s in the looks as well, too, so if you see what this engine looks like, it’s very classic looking, it’s gorgeous in my opinion.

We didn’t think pushrods gave us any real benefit, except a nostalgic one – these days the technology has moved on. We’ve taken the revs up to 7,500 rpm or so, at which point pushrods start becoming a bit more of a burden than an OHC motor. So yes, we’ve had to move on in engine technology, and we’re happy to do so

When do you expect to begin putting the Twins into showrooms? When will you start deliveries?

We expect to start deliveries in April 2018, and during next year we will get the Twins into different markets around the world.

Do you have a price projected for them, in US dollars, or Euro or Pounds?

Not yet, but certainly we want to make them very accessible for people, and as you can see where we’re coming from, we’ve become a large scale manufacturer. For us, now that we’re making 70,000 motorcycles a month, honestly, having a model that sells a few hundred or even a couple thousand, doesn’t move the needle anymore.

So how many Twins per month do you project manufacturing?

We’re presently making 70,000 bikes a month, all singles. We’ve got ample capacity, so by the end of this year it will be 825,000 per year. And if you extrapolate, we’ll be going beyond 70,000, more like 75,000-plus, even up to 80,000-plus monthly by 2019 with our current facilities Honestly, we’ll manufacture as many as the market will take. It’s all market based, so as a manufacturer that’s making 70,000 bikes a month, we can easily ramp up to whatever level is required. We have all the infrastructure, all the factory capacity, all that it takes.

OK, if there’s a huge amount of orders, it’ll take us a few months in case of any special tooling, but all the big process shops, machining shops, paint shops, all that’s already there, so we can make as many as we need to make. So the manufacturing is never an issue, it’s just acceptance for the bikes in markets, and then we can ramp up as much as it takes. We don’t want to put a cap on production – there’s no reason to. But we do want the Twins to be a sizeable proportion eventually of our overall production. Yet with all these huge numbers we’re talking about, we still have just 6% of the total Indian motorcycle market….

How about international markets?

We’re now only at the start of our international efforts, and it’ll take time – but we’re proceeding well. It’s not just America, we’re doing well in the UK, and we’re doing really well in France right now – for some reason the French love Royal Enfields! We’re building distribution, building a brand that businesses can trust. So dealers can trust us that we will do the right thing, that we’re here for the long term, that we will support them. Not just in parts and service and motorcycles, but also in building the brand and bringing customers in, understanding the market.

So we’ve been doing that for many years, and that entire foundation now will help us in selling our Twins. Because without that we’re nothing. So we had a huge distribution problem in the US, and the only way we could fix it was on our own, by starting our own distributor. It was to do with the size of the country, whereas in smaller markets things have gone well. We are actually very fortunate that we have very good distributors in markets like UK, France, Germany, Italy, Spain, Portugal, etc.

When will the Himalayan be available in Euro 4 guise?

The Euro 4 Himalayan with fuel injection is on the high seas, and it should be hitting those markets early next year. Actually, this has been very interesting, and taught us a lot. We honestly didn’t think there was a market outside India for the Himalayan, which we conceived largely as an Indian market model. But then as you know, people from around the world said, ‘We’re very interested in this’. So then we scrambled around to sort of make it compliant in other markets. So that was a big learning curve for us. Of course the 650 Twins were always projected for markets around the world, but that also helped us in thinking things out properly. So what we’ve done with the 650 Twins is to provide the highest spec that’s required in any market in the world, so there’s just one single model for everywhere.

Will you make a larger capacity version of the Himalayan engine, which is an all-new OHC design?

There’s no current plan for that, but who knows what happens later?! But right now we don’t plan to make a larger capacity Himalayan.

Do you plan to use it for any other non-dual purpose models?

Maybe, but there’s nothing coming right now. We’re focusing 100% on the Twins at present.

How do you feel about Mahindra buying BSA – is it very high on your list of concerns?

You know, we don’t take any competitor lightly. We keep an eye out for everybody, but we make sure we do things very differently.

Does it appear to you that Royal Enfield’s been successful with a particular kind of very individual product, and that Mahindra has effectively said, “Well, our idea of competing with Hero and Bajaj didn’t work, so let’s try and get some of Royal Enfield’s market.”

As you know, me-too strategies rarely work. People have tried unsuccessfully to copy big American motorcycles for decades now, and it’s not that easy.

Is it true that you were interested in acquiring Ducati?

A company like ours must always keep our eyes and ears open for opportunities. That’s all I’ll say about the

company you just mentioned. But we have, I believe, such a strong business, with a huge future ahead of us, I wouldn’t want to distract ourselves from that. On the other hand we’re not an ostrich, either – we don’t want to keep our head in the ground and say, “Look, this is the only thing we do.” We have to keep looking around, seeing what’s out there, and make sure that we address different opportunities as they arise. There’s huge, monumental shifts going on in the world motorcycle industry landscape today. I mean there’s electrification, there’s connectivity, there’s cities just bursting at the seams. That’s going to change the demands for mobility a lot. And we’re not going to ignore that – we’re working on those things as well.

Are you looking at electric motorcycles?

Yes, we are looking at it, but it will always be with a totally different lens. Of course, there’s always the opportunity to take an electric powertrain and stick it into a conventional motorcycle, like the car guys do, but I don’t think that’s the future. I think you have to look at the opportunity very differently, and Royal Enfield will always be unique, and unconventional, and try to approach it as consumer-led rather than technology-led.